According to SunSirs monitoring, the average price of primary white granulated sugar was 5,776 yuan/ton at the beginning of last week, and the average price was 5,743 yuan/ton last weekend, and the price fell by 0.58%.

Market analysis

In terms of imported sugar, the General Administration of Customs showed that China imported 300,000 tons of sugar in May, an increase of 180,000 tons from the previous month, but a decrease of 80,000 tons year-on-year. From January to May 2020, China imported a total of 830,000 tons, a year-on-year decrease of 90,000 tons. The cumulative imports for the 2019/20 crushing season as of the end of May were 1.81 million tons, an increase of 40,000 tons year-on-year. In May, the year-on-year decrease in the number of imports narrowed, and after the reduction in import taxation, the total amount of imported sugar in June and beyond may have increased year-on-year. The domestic processed sugar output is currently 89,600 tons, an increase of 56,700 tons year-on-year. With the overseas raw sugar imports onshore superimposing the domestic economic recovery, it is expected that the operating rate of processed sugar factories will increase significantly, which is not conducive to the strengthening of futures prices.

In May 2020, China's sugar industry stock was 4.0963 million tons, which was the same as the same period last year. From the data of sugar sales, as of the end of May, the cumulative sales of sugar in the country during the sugar-making period were 6.3109 million tons, with a cumulative sugar sales rate of 60.64%, a year-on-year decrease of 1.33%. In May, the monthly sales of sugar were 783,200 tons, a year-on-year decrease of 115,100 tons. As the market generally expects the favorable consumption season to boost the demand for sugar, on the basis of the gradual improvement of sugar downstream consumption in April and on the right track, it is expected that the destocking rate of sugar in May may be higher than expected.

In Brazil, as of June 16, a total of 251 sugar mills in central and southern Brazil have been squeezed, a year-on-year decrease of two; a total of 187 million tons of sugar cane were squeezed, an increase of 8.77% year-on-year, and cumulative sugar production was 10.569 million tons, an increase of 57.09% year-on-year. In the first half of June, Brazil produced 2.549 million tons of sugar, an increase of 36.28% year-on-year, crushed sugar cane 41.74 million tons, a year-on-year decrease of 1.91%, sugar cane sugar production ratio of 47.11%, higher than last year’s 35.69%.

In terms of exports, ISMA said that sugar exports in 2020/21 are expected to reach a record 6-7 million tons, up from 5.2 million tons in the previous year. Thailand’s sugar exports may fall below 6 million tons, so India has the opportunity to expand its export business to Asia. As the epidemic affects the sluggish ethanol sales, sugar factories are currently processing more sugar cane into sugar, which is not conducive to stronger sugar prices.

Outlook forecast

SunSirs white sugar analysts believe that the increase in imported sugar after June has not been reduced, so supply-side pressure still exists, while the demand-side May sales and sales rate is lower than expected. It is still difficult to see a rise in the medium term, but there is still room for decline.

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